Facts of Life

Peter Hitchens writes:

Sharks bite, cowpats stink and politicians lie. I’m used to all these things. They’re facts of life. But I can’t stand it when people pretend otherwise.

The Chancellor, George Osborne, should this week have been laughed out of the House of Commons and then out of the Treasury.

Yet his ridiculous claims of success, and his comically incredible predictions based on unfeasible spending cuts, were actually taken seriously.

What’s more, many people preferred to concentrate on his blatant electoral bribes than to examine his shocking record.

Think of him as the captain of a rusty and listing ship, whose pumps can barely stay ahead of the water that constantly seeps between its thin and damaged plates, whose engine is close to breakdown, whose fuel gauges are nudging zero.

Yet despite all this, he proposes to you that you accompany him on a voyage to the Antarctic in midwinter.

And when you mutter that this is perhaps not wise, he orders an issue of rum from the ship’s emergency reserve.

Do you then praise him for his astuteness? Shocking numbers of people did so this week. The voyage has begun – and we can’t get off the ship.

The trouble is, you have to look carefully to see this. Mr Osborne is missing his borrowing targets, and is less than halfway to getting rid of the deficit, despite having planned in 2010 to have done so by now.

The easiest spending cuts have already been made. Thanks to low tax receipts, he has postponed his vaunted balancing of the books by two years.

Nobody believes he can actually do so.

The low receipts are caused by the fact many of the ‘jobs’ he claims to have created are so poorly paid. Millions can’t afford to live on their low wages, and are borrowing to bridge the gap.

Real wages will be lower in 2019 than they were in 2007. No wonder household debt as a percentage of income is forecast to rise soon from 146 per cent to 180 per cent.

Our boasted ‘growth’ is mostly caused by mass immigration, which has expanded our Gross Domestic Product (GDP). But GDP per head isn’t going up.

Nobody believes Osborne or anyone else can make the cuts promised for the next four years.

Rob Wood, chief UK economist at Berenberg Bank, described the projected cuts as ‘implausible’, while Paul Johnson, of the Institute for Fiscal Studies, said the prophesied reduction was ‘huge by any standards and bigger than the cuts so far delivered’.

Meanwhile, many people still don’t understand the difference between ‘deficit’ and ‘debt’. Nor does the Prime Minister, who once mixed them up in a scripted broadcast.

The deficit is the annual gap between what the government spends and what it raises, made up by borrowing.

The interest on this, which could shoot up at any moment if world interest rates rise, currently costs us roughly as much each year as the defence budget.

Our budget deficit is 5.2 per cent of our GDP. It is 4.4 per cent in France, which British Tories often deride as a Leftist basket-case.

It is 0.2 per cent in Germany. The US deficit, once comparable to ours, has dropped to 2.8 per cent of GDP.

The national debt is what we have piled up by decades of spending more than we make. It is approaching £1.5 trillion (£1,500,000,000,000). We cannot possibly pay it off.

This is an incredibly serious mess. It will not be solved by another mini housing boom or by the building of a few roads.

Those responsible now plan to present themselves to the country next May as the people who repaired our economy.

In any sphere outside politics, this would be criminal fraud.